Posts Tagged ‘SLV’

On the face of it, it may seem a bit odd. Gold is the traditional store of value. But for long-term investors, it’s important to understand that silver prices have an 84% correlation to gold prices over time. One big thing silver has going for it moving forward is it has growing industrial uses that gold doesn’t have. It could well be the key strategic metal for the 21st century.

History shows that when silver has a big rally off a bottom, it typically retraces about 50% of the rally. Levels may change slightly if silver prices continue to creep up in the short-term, but it provides an approximate buy location for when the pullback does develop. Now is not the time to be aggressively buying silver. Patience is likely to yield much lower entry points.

Despite my ongoing belief that we are now in a corrective phase for the precious metals, I think that owning silver versus owning gold is a high-probability trade that could be the 2016 Trade of the Year. I am going to put on a trade this week that effectively favors silver over gold and is a high-risk method of shorting the Gold-to-Silver Ratio.

Everything from COMEX silver warehouse movement, deliveries against futures contracts, changes in the big silver ETF, SLV, sales of silver coins from the U.S. and Royal Canadian Mints point to the massive accumulation of silver by JPMorgan. They are positioned to make $100 billion or more in a runaway silver market. They will make $1 billion on a $2 rise in silver prices.

Do you believe the ETF’s are actually backed by physical metal? We have some turnover in the SLV and it is counter intuitive. It has to do with avoiding SEC shareholding requirements and moving silver around that might be needed elsewhere. But generally speaking, I don’t have any reason to doubt that the SLV doesn’t have the silver to back the shares. I know a lot of people doubt it.

Aside from the benefit of being in position to profit by fivefold or more, real silver provides an unquestioned investment alternative in a financial world primarily denominated in record debt & counterparty interdependence. Silver can go out of & come into investment favor, but when held in the right form, it can never go bankrupt or default. Simply stated, it’s real & spectacular.

The big buyer is exploiting a loophole in the law that requires the Mint to produce to whatever the demand might be. So JPMorgan artificially depresses silver prices via short sales on the COMEX and then requests that the US Mint sell it all the Silver Eagles it can produce. JPM wants all the silver it can get its hands on.

The movement from $17.5 to $50 from 2010 to 2011 had only a small correction. It just played as a gigantic parabola. What we know is that parabolas are reverted back below their previous channels. Based on long-term demand line, formed during a period of over 12 years, the support for silver price is around $11-$12.

None of the fundamentals are currently reliable for market timing, charts being preferred for that aspect, and even the charts are not indicating the “when” will gold and silver embark on a change in trend. With an overload of news events, a shorter read of what is going on in the markets via the charts makes more sense.

Silver looks to be on the verge of a major new up-leg, finally emerging from the past couple years’ ugly sentiment wasteland. And while investors’ ongoing silver stealth buying continues, it’s been modest. So there is vast room for capital inflows to accelerate dramatically as gold mean reverts higher.

The most plausible explanation for why such an extraordinary number of Silver Eagles were sold in 2014 relative to Gold Eagles is the presence of a big silver buyer. Silver Eagles only account for a small slice of what I allege JPMorgan has acquired in terms of physical silver. If JPM has acquired the amount of silver I claim, it’s no small matter.

Our belief is that it will take some time until the prices of gold and silver will move back in line with these fundamental trends. Until then, gold or silver owners can rest assured that the gold and silver market is not as bad as some would like to make you believe. Here are 10 remarkable gold and silver trends going into 2015.

With plunging base metal prices, given that majority of silver production is by-product from base metals; its entirely possible that global silver production declines 25%-50% over next 3-5 years, unless prices significantly increase. Silver industrial demand excluding silverware, jewelry, coins & bars is forecast to increase by 27% over the next 5 years.

JPMorgan rigs the price lower on those big down days, but not by selling enormous quantities of COMEX silver contracts short. JPM gets the price snowball rolling down by selling a small quantity of contracts short at critical times with the intent of inducing technical funds to sell larger quantities which JPM & other commercials then buy.

The commercials that operate these massive illegal & naked short positions are simply an extension of the users, the original CBOT board members. The silver users still maintain their ghost of an influence. Through rogue investment banks, they wield power over the price of silver. They’ve created an accident waiting to happen.

Silver prices have come back after 2 years of downside pressure, stabilized around $21 & it is likely just the beginning. Inflation is slowly creeping up & that adds upward pressure for silver. Is now a good time to buy silver? You need to be aware of key supply demand issues & several ways to play the metal.

Silver is not only a precious metal currency but also has massive industrial and technological demand, particularly in the technology sector. Smartphones alone generate billions of dollars in silver demand, much of it coming from technology giants. This article presents some bullish evidences to argue in favor of silver.

What will set off an explosive rally in gold and silver remains to be seen but there are plenty of potential triggers including war in the Ukraine or South Korea, as well as the significant financial risk of collapsing asset bubbles engineered by the extremely loose monetary policies of the world’s central banks.

JPMorgan realized that it was on the wrong side of the trade, after having discovered how tight the physical silver market was. Consequently, the bank had to crush the silver price with their HFT tricks in order to reverse the trend. By doing so, JPM could regain control over the silver market.

The evidence presented here suggests that the decline in the price of gold in mid-2013 and the subsequent raid of gold ETFs was engineered by Western Central Banks to help solve their physical gold supply problem. However, the resulting increase in demand exacerbated the problem.